The Inter-ministerial Committee for Credit and Savings ("Comitato Interministeriale per il Credito e il Risparmio" - CICR), chaired by Minister Tremonti, met today at the Ministry of the Economy and Finance.
The Committee resolved on an out-of-court settlement system for controversies; shareholdings banks and banking groups can hold; risky activities banks carry out with associated entities.
With the first resolution, CICR implemented article 128-bis of the banking sector consolidation act ("Testo unico bancario" - TUB) in connection with the introduction of out-of-court systems for the settlement of controversies involving clients to which banks and financial intermediaries must adhere. The regulation defines the procedures designed to encourage swiftness, economy and effectiveness of the protection without jeopardising the possibility clients have, at any given time, to lodge a petition through any other means of defence foreseen by law, and the composition of the judging panel, which must ensure impartiality and representativeness. A role has also been envisaged for the Bank of Italy in ensuring the functioning of the system and the achievement of the targets set out in the TUB.
As for shareholdings held by banks and banking groups, the resolution is aimed at aligning domestic regulations on supervision to those enforced at a EU level and applied by the principal European countries. While allowing for larger shareholdings to be held in non-banking companies by eliminating the regulations governing "downstream bank-industry separation" (the framework of reference are the EU thresholds: 15% of Tier 1 capital of the shareholding bank/group, which represents the concentration ceiling for a single qualified shareholding; 60% of capital, which represents the overall concentration limit for the sum of shareholdings in the same category), the regulations also simplify the administrative control on the acquisition of shareholdings in financial entities (these may be subject to pre-emptive authorisation with a view to ensuring their solidity, or, that is, to avoiding obstacles in the supervision carried out on a consolidated basis). The reform thus aims at reducing significantly the cases that require authorisation.
The widening of the options available to banks will be balanced by supervisory instruments and regulations defined within a framework centring on strengthened capital requirements, on intensified controls and on stronger organisational and governance regulations, with a view to preventing conflict of interests arising from the relations between shareholders. The reform also includes the issuing of a well-defined set of regulations governing the activities, considered as risky, with "companies in which interests are held," a subject matter that is strictly connected with that involving bank shareholdings.
Controls over risky activities in companies where interest are held were, at the same time, set out in the third resolution. The CICR resolution - in compliance with international standards (among which Core Principle n. 11 of the Basle Committee) and with the principal legal systems - sets down quantitative ceilings in terms of risky activities banks may take up from entities where interests are held, as well as a series of procedural regulations aimed at ensuring the substantial correctness of the deliberations, and controls on open interests.
The regulation applies with regard to associated entities, intended as the aggregation of a correlated party (entities that bear a direct link with the bank) and entities linked to it (entities linked to the bank by way of a correlated part).
In particular, correlated parties include those companies in which the bank exercises a significant influence, in view of the fact that conflict of interest and influence on the management may also arise from exposures (shareholdings and loans) with regard to companies where a significant interest is held, especially if industrial concerns.
The definition of the implementation act has been entrusted to the Bank of Italy. As for the application of the new thresholds, the resolution also envisages the possibility of setting such limits also in connection with the amount of market risks arising from transactions with correlated parties, also in view of the growing importance that this category of risks has within the financial system.
The Minister of the Economy and Finance, in his quality as CICR chairman, also disclosed information regarding the decree issued, on an urgent basis on January 7, concerning the compilation of the balance of payments statistics and international investment positions based on the direct reporting of economic agents.